This article first appeared in The Edge Malaysia Weekly on May 5, 2025 - May 11, 2025
THE Federal Land Development Authority (FELDA) is understood to be revisiting an earlier plan from some five years ago to privatise FGV Holdings Bhd (KL:FGV), sources familiar with the matter tell The Edge.
It is understood that FELDA has appointed Maybank Investment Bank Bhd to assist in the exercise, which may take place in three to four months, one source says.
While details are scarce, FELDA is believed to have obtained the buy-in from a couple of the larger shareholders and high-net-worth individuals still holding FGV shares. This could push the government agency’s shareholding to above 90%, after which a de-listing of the agribusiness giant will take place.
FELDA has an 81.92% stake in FGV following a failed privatisation offer at RM1.30 per share, initiated in December 2020, which strengthened its shareholding from 33.66% to the current level.
“Pahang is agreeable [to sell], maybe Sabah as well. There are others too, small shareholders,” one source familiar with the deal says. It is also understood that there may be other deals being negotiated, as some of the shareholders acquired their equity during FGV’s initial public offering in 2012 at RM4.55 per share and had taken on borrowings to buy the shares.
Aside from FELDA, FGV’s key shareholders include Kerajaan Negeri Pahang, which has 5% equity interest, and Sabah state via Chief Minister, State of Sabah, which controls 1.81%. Another Sabah entity, Ekuiti Yakinjaya Sdn Bhd, which is controlled by sovereign wealth fund Sabah Development Bhd, has 0.572%. Other noteworthy shareholders include Yayasan Islam Terengganu with 0.45% and Datuk Freddy Lim Nyuk Sang of Kretam Holdings Bhd with 0.39%.
“Both Pahang and Sabah had taken on debt to buy FGV shares, which is why they didn’t sell in 2020 (when the earlier privatisation was proposed) as they couldn’t impair the losses,” another source, who is aware of the privatisation plans, explains.
Maybank Investment Bank also advised on the initial privatisation in 2020, which was triggered by FELDA, which then owned a 33.66% stake in FGV. It bought over a 6.1% stake held by pension fund Kumpulan Wang Persaraan (Diperbadankan) and 7.78% interest held by Minister of Finance Inc-controlled Urusharta Jamaah Sdn Bhd for RM658 million cash. These acquisitions raised FELDA’s stake to 47.54%, and triggered the general offer, as FELDA was acting in concert with the settler’s cooperative, Koperasi Permodalan Felda Bhd, which had 5.25% in FGV.
In 2020 prior to the privatisation, FELDA had obtained cabinet approval for a recommendation to terminate its land lease agreement (LLA) with FGV. The LLA was for a tenure of 99 years starting in 2012 when FGV was listed. In return, FGV would pay FELDA an agreed amount.
FELDA’s top brass have said it should receive RM800 million a year for the 335,000ha of land leased while FGV executives have it that what is payable to FELDA is RM248 million per year plus 15% of operating profits from the leased lands.
The termination of the LLA is likely to be resolved when FGV is delisted.
FGV’s stock ended trading last Friday at RM1.19, gaining 10 sen or 9%, its highest level since last November, buoyed by a higher trading volume of 3.97 million shares. At its close of RM1.19, FGV had a market capitalisation of RM4.34 billion.
The corporate exercise is perhaps to be expected.
In mid-March this year, Bursa Malaysia rejected FGV’s application for a further extension of time of six months from March 3, 2025, to regularise its shareholding to below the 75% level, with a 25% public shareholding spread. FGV has not met the public shareholding spread requirements from February 2021, when it undertook the previous privatisation exercise.
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